Next to the marital home, retirement accounts are among the most considerable marital assets. This includes public and private pensions.
Colorado is an equitable division state. Therefore, pensions and other marital property are equitably divided between spouses upon divorce. An equitable division is based on fairness, not equality.
The following article outlines how a Colorado divorce may affect a pension. If you are facing a divorce and need case-specific information, speak with an experienced Colorado divorce attorney.
Is a Pension Marital Property in Colorado?
Whether a pension is marital property in Colorado depends on when it was acquired and whether its value grew during the marriage. In most cases, some portion of a pension is marital property. Like other marital property, it does not matter whose name is on a pension.
The portion of a pension that is marital property is the timeframe in which an actively accumulating pension coincides with a marriage. Dividing pensions is a complex process.
However, a basic overview is as follows:
- If a spouse acquires a pension before marriage and maintains that pension during marriage, contributions made after the marriage are considered marital property and subject to division;
- If a spouse acquires a pension during marriage and maintains that pension throughout the marriage and then divorces, the value of the pension during the marriage is marital property; and
- If a spouse acquires a pension before marriage but that pension loses money during the marriage, there is nothing to divide upon divorce.
How a pension is divided in Colorado depends on whether a pension is public or private. There are special rules for dividing public employee retirement plans like military pensions, and their division can impact Social Security benefits.
It is also wise to consult an experienced divorce attorney and Certified Public Accountant to learn the tax implications of pension and property division in a Colorado divorce.
Dividing Pensions in a Colorado Divorce
Different methods are used to divide public and private pensions in a Colorado divorce. Public employee pensions may be divided as agreed by the spouses or through:
- A fixed dollar amount;
- A fixed percentage amount; or
- A time-rule formula (calculated by dividing the months of service while married by the total months of service at the time of retirement, then multiplying that number by the retirement money received by retirement).
Private pensions may be divided as agreed by the spouses or by:
- The Net Present Value;
- The time-rule formula (above); or
- By reservation of the court upon vestment and maturation.
Regardless of how a pension is allocated between spouses, the documentation must be flawless. A mistake could be costly to either spouse.
To learn about the above methods and how they could apply to your Colorado divorce, reach out to an experienced Boulder divorce attorney today.
Contact an Experienced Boulder Divorce Attorney Today
If you need information about a public or private pension division in Boulder, Stahly Mehrtens Miner LLC, can help. We only focus on family law and provide honest advice you can trust.
At Stahly Mehrtens Miner LLC, we will work beside you every step of the way. We are highly-skilled in litigation, mediation, negotiation, and collaborative divorce.
Call or contact Stahly Mehrtens Miner LLC, online to schedule your confidential divorce consultation today.